Iran tries to split UN as it rejects nuclear demands

After months of defiant rhetoric over its nuclear programme, Iran formally rejected an international demand that it suspend uranium enrichment yesterday to allay western fears that it wants to build an atomic bomb.

The rejection, in a 23-page response submitted by the country's chief nuclear negotiator, Ali Larijani, to a broad-ranging incentive package, set Iran on a collision course with the UN security council. The council has passed a resolution requiring Iran to suspend uranium enrichment - a process that can be used to produce nuclear weapons - by August 31 or face the prospect of economic sanctions.

In what was being seen as a bid to split the council, Iran's response came with detailed counter-proposals, including a call for future talks under a "new formula".

Mr Larijani, who has criticised the incentives offered, couched Iran's answer in conciliatory language, describing it as "constructive". "Iran is prepared to hold serious talks," he told Iranian state television. "The representatives of the six world powers should return to talks to reach an understanding about all the issues mentioned in the offer, including nuclear issues, long-term technical and economic cooperation, as well as security cooperation in the region."

Mr Larijani was speaking after presenting the response to diplomats from Britain, France, Russia, China, Germany and Switzerland, which has represented American interests in Tehran since US-Iranian relations were severed following the 1979-81 embassy siege.

Few details of the document, described by one western diplomat as "comprehensive", were available. However, the Iranian request for a "new formula" is thought to include a proposal that temporary uranium enrichment suspension could be open for negotiations during further talks.

That idea is virtually certain to be rejected by the US, Britain and France, which believe Iran's nuclear programme is aimed at bomb-making, rather than domestic electricity as the Iranians insist. However, it could be sufficient to persuade the security council's other two permanent members, Russia and China - both of whom have extensive economic ties with Tehran - to oppose sanctions.

America, which has declined to rule out military action, reacted cautiously to the Iranian response, with John Bolton, the US ambassador to the UN, promising to study it carefully. He said: "From this definitive response, we will see whether they are now prepared to abide by their obligations under the nuclear non-proliferation treaty and convince the world that their intentions are peaceful, as they claim. But if it doesn't meet with the terms set by the security council, we will proceed to economic sanctions."

The council's permanent five members, along with Germany, presented the incentive package to Iran in June, two months after it announced it had enriched uranium sufficiently to produce its own nuclear fuel cycle. The package proposes a range of economic sweeteners, including civilian nuclear technology, in return for Iran abandoning its solo nuclear activities for international cooperation.

Iran initially greeted the offer positively. But analysts in Tehran say the Islamic leadership has turned against it, seeing it as a front for the US desire for regime change. "They think that if they accept, the Americans will come up with something else, such as human rights, to destabilise them," one source said. "They think the nuclear issue is simply the current American strategy for undermining them. So they've decided that the nuclear issue is the one over which to have a confrontation, since it's a national issue supported by most Iranians."

Iran's supreme leader, Ayatollah Ali Khamenei, who has ultimate authority over the matter, said on Monday the country would continue "on the nuclear path". He dismissed the west's claims that it was trying to develop nuclear weapons as a pretext for what he called its opposition to the development of Islamic countries.

The leadership's tough stand is bolstered by a belief that high oil revenues will enable it to withstand any sanctions that the UN imposes. Iran is the world's fourth largest crude producer.

Mr Khamenei's remarks on Monday prompted international crude prices to surge to $73.05 a barrel.

Tehran's atomic drive

Is Iran a nuclear power?

No. But it has an ambitious uranium enrichment programme intended to make it a nuclear power. Russia is building and supplying the fuel for Iran's first nuclear power plant. Iran says it is developing its own nuclear fuel cycle (uranium enrichment) to become self-sufficient. The west fears all this is a front for a bomb programme.

Will it get the bomb?

Iran insists its nuclear programmes are exclusively civil. But the technologies can quickly be turned to military ends.

What has the west offered?

The US, Russia, China, Britain, France and Germany offered a detailed package to Iran in June including long-term talks on political, economic, trade, security, and nuclear technology issues. It recognises Iran's right to nuclear power and would help it develop power stations. Russia would supply nuclear fuel and repatriate used fuel to prevent it being used for weapons. Iran has to "suspend" its own nuclear fuel output indefinitely. It refuses to do so.

What happens next?

A security council deadline ordering the enrichment freeze expires on August 31. Russia and China are reluctant to impose sanctions.

Who's winning this battle of nerves?

Iran, so far. Tehran has manoeuvred skillfully, exploiting divisions, playing for time, coaxing better offers, and still advancing its nuclear programme. Tehran has looked on as the US wiped out its biggest foes - Saddam Hussein and the Taliban. The US travails in the Middle East and the rise of the Shia from Iraq to Lebanon all boost Iran.

How advanced is the programme?

Iran is converting raw uranium into uranium gas, then feeding the gas into centrifuges for enrichment. Estimates of when Iran could have a bomb range from four-10 years.

What's all the fuss really about?

A lack of trust. The neo-cons in Washington don't believe a word from the mullahs. The hardliners in Iran are convinced the US wants regime change. The Europeans are playing the middleman, freezing the nuclear dispute until there's a better climate of confidence. That could be a long wait.Ian Traynor